The Quick Read: Asset depletion turns a slice of your liquid assets into extra monthly qualifying income, and on a super jumbo bank statement file it stacks on top of your deposit income, so the lift equals your net eligible pool divided by the program’s divisor. The pool is smaller than your statements suggest, because the down payment, closing costs and reserves come out first. The divisor is the biggest swing factor, and on very large loans it is the longest one.
- The formula is net eligible assets divided by 36, 60 or 84 months, depending on the loan and your debt ratio.
- Above $3,500,000 the divisor is 84 months, so the lift is smaller than most borrowers expect.
- The same dollars cannot serve as down payment, reserves and income at once.
- It works on primary residences and second homes, not investment property.
- Every loan above $4,000,000 is reviewed case by case before submission.
Across the wholesale network Lendmire works with, asset depletion is a gap-filler, not a replacement for income. This article covers the arithmetic, the program rules, and the cases where the lift disappears.
What Does Asset Depletion Actually Add?
It adds one number to the income side of your debt-to-income test. That number is your net eligible assets divided by a fixed count of months, and you keep the assets. Nothing is pledged, sold or withdrawn. The calculation is a qualifying convention, not a spending plan.
A bank statement loan builds income from 12 or 24 months of deposits. The lender applies an expense ratio, then divides by the statement months. Where the program allows stacking, the depletion figure is added to that deposit income. Debt-to-income is then recalculated against the larger total. Through select wholesale programs, debt-to-income can run to 50%, subject to full underwriting.
The ratio math is easy to see with percentages. Each dollar of net eligible assets adds about 2.8% of that dollar per month at a 36-month divisor. At 60 months it adds about 1.7%. At 84 months it adds about 1.2%. The 36-month divisor therefore produces roughly 2.3 times the income of the 84-month divisor from the same pool.
How Does Underwriting Build the Number, Step by Step?
Underwriting runs five steps in order: count eligible assets, apply asset-class percentages, subtract what the deal consumes, divide by the divisor, and retest debt-to-income. The order matters because each step shrinks the pool before the divisor touches it.
1. Gather eligible liquid assets. These are U.S. liquid accounts documented with statements. Retirement accounts count at 70%, or 80% for a borrower age 59.5 or older.
2. Remove what never counts. Business funds, gifts, unvested stock, cryptocurrency and most trusts are excluded. A revocable living trust is the exception that can qualify.
3. Subtract the deal’s own needs. Down payment, closing costs and required reserves leave the pool before any division happens.
4. Divide by the divisor. The program picks 36, 60 or 84 months. The next section explains how.
5. Add the result to deposit income and retest. Debt-to-income must land at or below the program ceiling, subject to lender guidelines.
Here is a modeled example using index points, not dollars. These are illustrative assumptions, not market data. Start with 100 index points of liquid assets, 25 of them in a retirement account held by a borrower under 59.5.
| Step | What happens | Index points |
|---|---|---|
| Gross liquid assets | Starting pool | 100.0 |
| Retirement haircut | 25 points counted at 70% | 92.5 |
| Down payment and closing costs | Modeled at 30 points | 62.5 |
| Required reserves | Modeled at 8 points | 54.5 |
| Net pool | What the divisor sees | 54.5 |
Divide the 54.5-point net pool by 84 and it adds about 0.65 points of monthly income. At 60 months it adds about 0.91. At 36 months it adds about 1.51. The same portfolio is the same size in all three cases, and the divisor alone creates the spread.
Takeaway: the pool you are proud of and the pool the divisor sees can differ by half or more.
Which Divisor Applies to Your File?
The divisor depends on how the assets are used and how large the loan is. Through select wholesale programs, subject to full underwriting, the asset allowance path uses three divisors.
| Divisor | When it applies | Debt-to-income condition |
|---|---|---|
| 36 months | Supplemental to bank statement income | DTI at or below 60% without assets |
| 60 months | Supplemental to bank statement income | DTI above 60% without assets |
| 84 months | Standalone, or any loan above $3,500,000 | Applies regardless |
The 84-month rule is the one super jumbo borrowers miss. A borrower on a $4,200,000 file may have heard that depletion runs on 36 months. At that size the 84-month divisor governs, and the file is reviewed case by case before submission. Plan for the smaller lift.
The path is limited to primary residences and second homes at an 80% maximum LTV. The normal size ladder still applies underneath it. On a primary-residence purchase between $3,000,000 and $3,500,000, for example, the ladder tops out at 75%. Between $3,500,000 and $4,000,000, a primary-residence purchase carries 75% with a 760 credit tier.
Credit starts at a 660 floor on the portfolio non-QM program, which carries files to $6,000,000. It rises to 700 above the super-jumbo line. The bank portfolio program carries twelve-month-statement files to $30,000,000 on its own ladder: 65% to $5,000,000, 60% to $10,000,000 and 55% to $30,000,000, always on review above $4,000,000.
How Much Does It Help on a Real File?
It helps most when the debt ratio sits just above the ceiling, and it helps least when income already clears. The cleanest way to see this is reverse math: how big must the net pool be to close a gap?
Here is a modeled case with assumed inputs. A borrower’s deposit income produces a debt-to-income of 56% without assets. The program ceiling is 50%. Income must rise by a factor of 56 divided by 50, or 12%.
- At a 36-month divisor, the net pool must equal about 4.3 times the borrower’s monthly qualifying income.
- At an 84-month divisor, the net pool must equal about 10.1 times that income.
The rule of thumb is to multiply the monthly income gap by the divisor. Each $1 of added monthly income needs $36 of net assets at 36 months, $60 at 60, and $84 at 84.
That is why depletion often rescues a borrower on a $2,000,000 file and does little on a $5,000,000 file. A borrower with a 50% debt ratio already needs nothing from the pool. A borrower with a 65% ratio may need more pool than the assets can provide, even before reserves.
Think about which assets are doing double duty. If the same brokerage balance funds the down payment, sits in reserves and feeds the depletion pool, it can only be counted once. Underwriters remove it in step three. Borrowers who count it three times overestimate the lift by a wide margin.
When Does the General Rule Break?
The rule breaks on entity-held money, excluded asset types, occupancy, and cash-out files. These edge cases cause most of the surprises.
Money inside the business. Retained earnings inside an S-corp or loan-out entity do not count toward the asset pool. Only funds that have reached your personal account count. Deposits you transfer from your own business into a personal account count at 100% for bank statement income, but a balance left in the company is not a personal asset. Lendmire’s piece Can a Trust-Held Asset Account Fund a Super Jumbo Bank Statement Loan? covers the related titling question.
Cryptocurrency, gifts and unvested stock. None of these count. A borrower with a large crypto holding often finds the pool far smaller than expected.
Investment property. The asset allowance is limited to primary and second homes. A rental purchase is better served by a DSCR loan. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and the borrower’s personal income and assets are not the main test. Lendmire’s complete DSCR loans guide explains when that route beats a personal-income program.
Cash-out. Cash-out proceeds cannot satisfy reserves above the super-jumbo line. The pool you plan to subtract for reserves must exist outside the new loan.
Assets-only is a different animal. It qualifies with no debt-to-income test, because U.S. liquid assets must equal the loan amount plus closing costs plus sixty months of any net loss on other residential property. That is far more liquidity than the allowance path asks for, and it is not stacked with deposit income.
Does the Regulatory Frame Change Any of This?
It sets the guardrails but not the formula. The OCC describes asset depletion as using an applicant’s assets to compute a hypothetical annuity stream, added to other income. It notes the practice is often used for high-net-worth applicants with substantial liquid assets but limited cash flow. That bulletin addresses national banks and federal savings associations, so it does not directly govern every non-bank lender. A law-firm review of the bulletin points out that it offers no safe harbor and no specific formula.
Federal ability-to-repay rules work the same way. The CFPB’s compliance guide lists eight factors a lender must consider and says lenders may set their own standards, provided they verify what they rely on. No federal rule fixes a divisor or a haircut table. That is why the same portfolio produces different income in different programs, and why comparing programs matters.
What Are the Reserve and Overlay Costs?
Reserves scale with loan size: 3 months to $500,000, 6 months to $1,500,000 and 9 months above. Each additional financed property adds 2 months, up to a 12-month maximum, and first-time investors carry 12 months. Those dollars come out of the pool in step three. Lendmire’s article on how a super jumbo bank statement loan holds reserves goes deeper on that side.
Overlays tighten above $3,500,000 on a primary residence and above $3,000,000 on a second home. They include a 700 credit floor, a 0x30x24 housing history, 48-month seasoning on any credit event, and a ten-acre maximum on rural property. Borrowers must be U.S. citizens or permanent residents, and non-occupant co-borrowers are not allowed. These are typical ranges through select wholesale programs, subject to full underwriting and not a commitment to lend.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
Asset depletion: a qualifying method that converts eligible liquid assets into monthly income by dividing them over a set number of months.
Divisor: the month count the net pool is divided by, which is 36, 60 or 84 on the asset allowance path.
Net eligible pool: the assets left after haircuts and after down payment, closing costs and reserves are subtracted.
Stacking: adding the depletion figure to bank statement deposit income instead of using assets alone.
Assets-only: a path that skips the debt-to-income test and requires liquidity equal to the loan plus costs.
Haircut: the percentage at which an asset class counts, such as 70% for retirement accounts.
Which Structure Fits Which Borrower?
The right structure depends on where your debt ratio sits and how liquid you are. Here is the side-by-side comparison.
| Path | What it tests | DTI test | Best fit |
|---|---|---|---|
| Bank statements alone | Deposit income after expense ratio | Yes | Strong deposits, low debt |
| Statements plus asset allowance | Deposits plus pool income | Yes | Debt ratio just over the line |
| Assets-only | Liquidity vs. loan plus costs | No | Very liquid, thin income |
| DSCR (rental purchase) | Property rent vs. payment | Not on personal income | Investment property |
A founder with strong deposits and a modest mortgage usually needs nothing beyond the statements. A physician with heavy debt and a large brokerage account is the classic stacking candidate. An entertainer or athlete with lumpy deposits but deep liquidity may look at assets-only. An investor buying a rental should compare DSCR first.
One more point in practice: this is a comparison across lenders. Some programs run a longer divisor with fewer overlays. Others run a shorter divisor with a lower leverage ceiling. Lendmire, as a broker, can place a file with whichever program fits the numbers.
What Should You Gather First?
Collect 12 or 24 consecutive months of statements, since transaction histories never substitute. Pull two months of statements for each liquid account you plan to count. Add the expense-ratio support, which depends on the type and size of the business, with a lower ratio for a service business with no employees and higher ratios as headcount grows or for any product business. An accountant-provided ratio or a profit-and-loss method capped at 80% is the alternative. Business statements require at least 25% ownership.
If you are financing a high-balance property on your assets rather than income documents and want to see how the numbers work, Lendmire can help you compare super jumbo asset-qualification options based on your liquid assets, the property, credit profile, leverage and your goals. Lendmire’s consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. You can reach the team at 828-256-2183.
Frequently Asked Questions
Do I have to sell or move my assets for depletion to count?
No. The assets stay where they are and keep earning. The lender documents them with statements and runs the arithmetic as a qualifying convention. Large moves of money close to application can trigger sourcing questions, so leave accounts alone while the file is open.
Can asset depletion be stacked with bank statement income?
Yes, through select wholesale programs. It is a supplement to deposit income on the asset allowance path, subject to full underwriting. The 36- or 60-month divisor applies on smaller files, and the 84-month divisor applies above $3,500,000 or when assets stand alone.
Do retirement accounts count?
Yes, at 70%, or 80% once the borrower is 59.5 or older. Cash and other qualifying liquid accounts follow the program’s schedule. Business funds, gifts, unvested stock, cryptocurrency and most trusts do not count, though a revocable living trust can.
Does it work for an investment property?
Not on the asset allowance path, which is limited to primary residences and second homes at an 80% maximum LTV. Rental purchases are usually better matched with a DSCR loan, which looks at property rent against the payment. Sub-1.00 coverage is available through select lenders in the network, but leverage and terms adjust.
Is a large loan treated differently?
Yes. Above $3,500,000 the divisor is 84 months. Above $4,000,000 every file is reviewed case by case before submission, and the leverage figures on the ladder are ceilings, not promises.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Mondaq law-firm commentary on the OCC bulletin
3. CFPB ATR/QM compliance guide
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get a Super Jumbo Bank Statement Loan After Changing Fields · How to Get a Super Jumbo Bank Statement Loan on a Condotel Unit · Bank Statement Loan vs Asset Depletion Loan for Musicians
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.